chartered accountant - jamaica stock exchange...mar 09, 2015  · best investment option for 2017 ....

2/23/2017

Best investment option for 2017

By John Jackson

Chartered Accountant

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• Investors have many choices to invest in Jamaica

• Many took the route of

Money market a) Local J$

b) US$

Stocks

Unit Trust

Real estate

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Best investment option for 2017

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Best investment option for 2017

The winner

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Best investment option for 2017

Investing for your future

• Investors gladly invest in RE & US$

They think they can’t loose

• Select JSE stocks out perform both by miles

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Best investment option for 2017

Investing for your future

Just a gentle reminder Profit drives stocks & dividends too

But interest rates critical

FX market

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Investing for your future

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Best investment option for 2017

What did many miss

Gains since 2014 lows to peak

• Main market up 180%

• Juniors up 353%

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Best investment option for 2017

Investing for your future

In 2015 a total of 26 doubled or more than

doubled

In 2016 11 stocks more than doubled

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Best investment option for 2017

Investing for your future Investments

tools

Technical analysis – past market movements

Fundamental analysis – financials & environment

Combine both for best performance

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Best investment option for 2017 Tomorrow

By John Jackson

Chartered Accountant

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2/23/2017

Best investment option for 2017

Investing for your future

Stock market short term performance

Min market up 26% in 2016 JM 45%

2017 AJI 0.5% JM 7%

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Investing for your future

What is ahead?

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Graph of market index

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Investing for your future

280,000 points on main market

AJ index

33% from Jan 23.

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Best investment option for 2017

Graph of market index

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Best investment option for 2017

Investing for your future

3,200 points for junior market index

15% away from Friday Jan 23

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Price at EPS Current

Company 24/1/2017 2017 PE

ISP 9.00 2.00 4.50 MEDDS 4.90 1.00 4.90 tTECH 6.50 1.20 5.42 LASM 5.20 0.90 5.78 AFS 25.30 4.35 5.82 KEY 3.00 0.50 6.00 MAIN 2.00 0.33 6.00 LASFN 3.65 0.55 6.64 JETCON 10.00 1.50 6.67 DCL 14.00 2.00 7.00

TOP 10 for 2017

Junior market

2/23/2017

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Best investment option for 2017

Price at EPS Current

Company 24/1/2017 2017 PE

BIL 5.75 2.50 2.30 C&W 1.35 0.38 3.55 RJR 1.40 0.35 4.00 CCC 32.00 8.00 4.00 JMMB 15.31 3.00 5.10 BERG 8.50 1.60 5.31 PULS 4.35 1.35 3.22 NCB 52.60 8.00 6.58 SCINVST 33.00 4.73 6.98 SGJL 36.00 4.50 8.00

TOP 10 for 2017

JSE Main market

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Best investment option for 2017

Investing for your future

Investments tools

The markets are at a high now

Risk is greater than in 2014 early 2015 & most of 2016

But valuations, current economic trends, profits and interest rates suggest there are more gold in

those hills

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The end of presentation

Thank you

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Best investment option for 2017

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Other things of

note

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Best investment option for 2017

• Growing profits = Dividends & Stock prices

• JSE sold at $1.50 late in 2014 – went to $40

Capital fully paid back in 1 year

• Dividend paid from July to mid 2016 = $1.57

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Best investment option for 2017 Investing for your future

What did $100,000 investment do?

AFS in 2010 now $1m - best performer by far to 2015

CCC end of 2014 $1.5m to 2017

Kremi in 2014 low $1.17m

HonBun from 2014 low = $1.29m

JSE end of 2014 now $1.5m

Pulse $922,000

Paramount $1.87m to peak

CHL $1.68m to peak

All but Pulse was IC Insider.com BUY RATED

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Best investment option for 2017

Investing for your future

• Jamaicans need to switch priorities to be well off

at an early age

• Investors prioritize buying their first house

• But they should instead be looking at buying

their first stock before the house

• Why? A number of reasons

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Investing for your future

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• Stocks grow faster

• Use stock gains to buy house

• More liquid than real estate

• Can sell some shares

• Try selling part of house

• Stock investing creates meaningful 2nd business

• Allows for learning about investments

• Dividends grow over time

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Best investment option for 2017

Investing for your future

Dividends are important

A number of dividend yields competitive with money

market rates

Capital appreciation is key

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Best investment option for 2017

Investing for your future

Jamaican stocks have a long history of blow out

gains for some stocks eg.

Lascelles, Courts, Jamaica Flour Mills, Montego

Freeport

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Investing for your future

Main market – steady growers

Junior Market – rapid growers

Need growth in profits

Lower or stable interest rates

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Investing for your future

• All forms of investment require some amount

of knowhow be it RE, stocks, bonds etc.

• RE attractive due to the long holding periods

• For stocks we need gains tomorrow & everyday

• That is not how it works

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Best investment option for

2017

• The PE of money in 2014 was 11

• In 2005 PE=16

• The PE of JSE was 5 times 2014 EPS

• The PE of money is around 17

• PE JM 17 based on 2016 & 8 proj

• MM = 11 & 9.4

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Really profitable investing is not about

• Loving a stock or not

• Following the crowd

• Get info & act before the crowd descends

• Follow consistent revenue growth & profit

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Best investment option for 2017

Investing for your future

2/23/2017

Data suggest market at an early stage of a long term bull run

• See competitive FX rate driving local businesses

• Profits rising especially for JM stocks

• See interest rates falling

• See stability in economy with some growth

• Stocks should have another 3-4 years to run based on

history.

• Happy & profitable SM involvement

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Best investment option for 2017

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Best investment option for 2017

Investing for your future

• Good investments usually need time

• Nothing beats knowledge & Information

• It makes investors surefooted

• Invest based on good info not rumor

• Understanding interest rates relationship

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